- Market sentiment has been bearish for the past four months as BTC has been consistently rejected by local highs
- Selling pressure has not abated and could force another major move south
Bitcoins [BTC] The 2024 halving took place on April 19. Since then, however, the promised bull run has not yet materialized. At the time of writing, the Crypto Fear and Greed Index had a value of 46 – A sign of neutral sentiment.
On the weekly chart, Bitcoin continues to exhibit a bearish structure, with BTC posting lower highs and lower lows since late May. Insights into stablecoin flows reinforced the bearish view on the crypto market in the coming weeks.
Suspicions of a deeper price correction
In one CryptoQuant Insights post, popular analyst theKriptolik noted that there has been a big drop in Tether inflows [USDT] of exchanges. AMBCrypto took a closer look at the charts and found that inflows from stablecoin exchanges were at a six-month low.
When Bitcoin and the broader crypto market experiences a large price drop, stablecoin inflows tend to increase by a large amount. This indicates that buyers are using the dip to expand their crypto holdings.
The most recent sharp price drop occurred on August 5, when Bitcoin fell from $58.3k to $49k – a drop of 15.9%. On that day, stablecoin inflows reached $2.9 billion.
Therefore, the fact that we saw a stealthy influx from Tether exchanges when BTC fell below $60,000 can be interpreted as alarming news. It implied that smart money was waiting for a much deeper price drop before entering the market.
How low can the next move go?
AMBCrypto’s analysis of the liquidation heatmap revealed that the next major magnetic zones for Bitcoin would be $48.8k and $46.6k. There also seemed to be a pocket of liquidity of $53.6k. These levels would be the targets for BTC in the event of a price drop below $56,000.
Read Bitcoin’s [BTC] Price forecast 2024-25
A recent report warned that a dip below $56,000 could trigger a much deeper correction. The bull-bear market cycle showed bearish dominance, and the Tether exchange flow findings reinforced this bearish view.